07.11.2016

Thomson Reuters Expands Post-Trade Network

07.11.2016
Shanny Basar

Thomson Reuters has added EBS, the foreign exchange platform owned by Icap, to its post-trade network which has more than doubled publishers and receivers since last November as the FX industry faces greater regulation.

In a statement the firm said EBS joins more than 2,500 other publishers and receivers on Thomson Reuters Trade Notification (TRTN) which enables EBS to offer complete straight-through processing to its clients. Last November TRTN had 100 publishers and 1,000 receivers according to a statement and has also seen an increase in message volume of 80% this year.

Seamus O’Sullivan, global head of FX forwards – EBS Direct, said in a statement: “In addition to the existing EBS post-trade capabilities, we selected Thomson Reuters Trade Notification for its unrivalled global distribution footprint and to enable our clients to seamlessly integrate EBS Direct for straight-through processing.”

TRTN provides a single point for liquidity providers to connect with counterparties and broker networks, bank platforms, ECNs and FX venues globally can automatically publish on the network. Their clients then receive all their post-trade messages through one channel, securely in real-time and in a choice of industry-standard message formats.

In May consultancy Aite Group said in a report that the FX industry is likely to experience greater disruption, higher costs, and a fair amount of confusion for both the buyside and sellside due to increasing regulation.

“As the global FX industry awaits pending clarification on existing laws, implementation timelines for new regulations have been extended, and new global codes of conduct are about to be released,” added Aite. “All of these changes will impact FX industry operations for years to come.”

The consultancy said electronic trading in the FX market continues to grow, despite the decline in global trading volume, thanks to increasing use from voice-driven, real money managers and corporations. As a result, Aite Group expects to see increasing adoption of electronic trading across all major FX instruments, reaching about 64% by 2019.

Javier Paz, senior analyst at Aite, said in a statement: “The industry is in search of a more comfortable and predictable ‘new normal,’ but we are not there yet. High levels of electronification and demand from users of FX prime brokered services are two reliable drivers that will pull FX demand forward over the medium term.”

In May the Bank for International Settlements introduced the first part of a global code of conduct for the foreign exchange market. The code covers conduct for the sellside, the buyside, non-bank participants, technology vendors and e-trading platforms and the first part of the code covers market ethics, information sharing, execution costs, trade confirmation, and settlement.

The BIS began pushing for a harmonised global code of conduct for the FX market in 2015 following regulators imposing fines for price rigging which led to banks including Barclays, Royal Bank of Scotland, Citigroup and JP Morgan paying more than £6.3bn in penalties and dozens of traders being suspended or fired.

The second part next year will include governance, risk management, and compliance as well as back office processes and electronic trading.

Alex Walker, head of post-trade at Thomson Reuters, said in a statement: “For trade notification it makes complete sense from the perspective of efficiency and growth to create an open, market-wide system that can serve and connect the entire FX market. Thomson Reuters is committed to partnering agnostically across the industry to offer a real-time, scalable, market-wide network that can service a volatile industry.”

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